5th Annual EVPA Conference

Event 5th Annual EVPA Conference – The Rise of Social Enterprise in Europe: a critical role for venture philanthropy
Date 18 November
Venue Amsterdam
Organizer European Venture Philanthropy Association

There are four things social enterprises need from venture philanthropists, according to Caroline Casey of Kanchi: ‘We need you to believe in us; we need you to help us become financially sustainable; we need you most in the scale-up phase; and we need you to allow us risk.’ This was the conclusion of a rousing (at least by philanthropy conference standards) opening presentation to the EVPA’s annual conference in Amsterdam earlier this month.

There are 1 billion people in the world with disabilities, she said. ‘They don’t have leadership, they don’t get educated and they don’t get funded’, not because people are bad but because they feel it’s nothing to do with them. She might have taken a similar view at one time but, ten years ago, she said, a rare eye defect caused her to become severely visually impaired, in fact legally blind. She realized then that disability had ‘everything to do with me. It’s who I am.’ Since then, the social enterprise she founded, Kanchi, has worked with business, government, media and the Irish public to help put disability on the public agenda in Ireland. It has launched the televised O2 ability awards in Ireland, and Telefonica is about to launch a Spanish equivalent. Kanchi is now working towards the development of Ability Awards International. ‘We want to be the “Inconvenient Truth” of disability,’ she said.

In his welcome address, EVPA chair Serge Raicher said the conference was putting forward social enterprise as a model when other models have been put to the test and found wanting. Moreover, continued conference chair David Carrington, it is a model that venture philanthropy could play a crucial role in supporting. The conference title is an assertion, not a question. There is much debate over what constitutes a social enterprise, he said, but he urged delegates not to become obsessed with definition. The main purpose of social enterprises is to pursue social and environmental returns, not to pursue profit maximization.

Rod Schwartz, CEO of ClearlySo, who had the misfortune to follow Caroline Casey (‘Glad she went first,’ he wryly remarked), had an even simpler definition of social enterprise – ‘it does good’. He thought of current world leaders as like ‘bad parents of a very dysfunctional family’. They won’t make the necessary changes. People like Caroline Casey will, he argued. ClearlySo, a social business marketplace based in the UK, is a ‘social business ecosystem’ which gives social enterprises access to capital, information, discounted professional services and visibility. Operational in the UK since March this year, ClearlySo Canada is about to launch, with Brazilian and Indian counterparts soon to follow.

Breakout sessions followed on scaling up social enterprises, on whether social enterprise is a passing fad or a ‘killer application’, and on the perennially vexed question of measuring social impact – a notorious hard nut of any approach to philanthropy, in fact the hardest, reckons Deirdre Mortell of One Foundation. When and how do you know what your impact is, she wondered? Often, you have to fall back on outputs as proxies. For example, improved literacy in children is a good predictor of improved future prospects, so if you can show the one, there is a good chance that the other will follow. In a presentation in the closing plenary, she observed that, of the six achievements One believes it has to its credit, only three were planned. The others happened accidentally.

The perfect couple?

A number of presenters mentioned the affinity of venture philanthropy and social enterprise – Gerit Zalm, chair of the Managing Board of conference sponsors ABN AMRO, described them as ‘the perfect couple’, and Rod Schwartz spoke of the approach of social entrepreneurs as being in ‘the sweet spot’ of venture philanthropy.

However, some speakers and some sessions engaged with a potentially difficult aspect of the relationship. For most venture philanthropy funds, the management of an investee organization is crucial – ‘the biggest bet is on the CEO,’ as Deirdre Mortell put it – and they have strong views on how they should be managed. What happens if those views are at odds with those of the current management?

In an afternoon workshop on setting up a venture philanthropy fund, Stephen Dawson of Impetus Trust acknowledged that the extent of involvement in management is often a difficult area. The key maxim, he said, is ‘don’t do it for the organization, help them to do it’. He cited the example of finance officers and how difficult it is to get able people to take on such roles in social enterprises, concluding that ‘it’s not our role to force change, but to encourage change’ where necessary. Both this session and another afternoon session on the relationship between venture philanthropists and social entrepreneurs stressed the importance of honesty and clarity to the relationship.

In the same workshop, Andrew Muirhead of Inspiring Scotland remarked on the fact that venture philanthropy funds do not always come from private sources. Scottish government funding, he said, has proved crucial in attracting private investment to Inspiring Scotland, and later on the government will be the natural follow-on funder in Inspiring Scotland’s exit strategy. However, he advised, ‘keep away from politicians’, both because their tenure of office is contingent and because their attention span can be short, depending on public or party opinion. The key relationships are with the civil service since they offer greater continuity.

Other afternoon sessions included roundtables on managing international investments, supporting early-stage entrepreneurs, social enterprise and the climate challenge, the use of debt and equity alongside grants, and fundraising for venture philanthropy in difficult times.

In a closing plenary presentation, Deirdre Mortell counselled patience. Echoing comments by both Andrew Muirhead and Stephen Dawson, she remarked that ‘everything takes longer than you think in the systems change business … Frustrations are always with us,’ she concluded in paradoxical fashion, ‘satisfaction is guaranteed.’

While venture philanthropy is One Foundation’s chief approach, said Deirdre Mortell, it does not run throughout its work. Their real focus is social change, not venture philanthropy (interestingly, she noted that One’s experience is that venture philanthropy can be applied to advocacy as well as to service providers).

Potential impact of social enterprises and venture philanthropy

In fact, perhaps the clearest recurrent strain of the conference was the question of what impact social enterprises and, through them, venture philanthropy can have. Social enterprises, felt Luciano Balbo of Fondazione Oltre, can develop new types of solution for social needs and help plug the ‘hole’ between the public sector and the market. However, he cautioned, they must avoid the excesses of the quest for shareholder value and the obsession with double-digit returns or they will be driven by the shareholders, not social impact.

Serge Raicher and John Kingston of Venturesome, who closed the conference, also raised the question of impact. The work of EVPA, said Raicher, is all about informing, connecting, engaging and having an impact – but the greatest of these is impact. If we don’t have an impact, he said, ‘all the rest is just noise’.

In closing, John Kingston reminded participants that the diversity of EVPA and the purpose of the ‘rainbow of funding mechanisms’ it brings with it is to achieve impact. He also counselled the audience to avoid complexity and jargon, speak clearly, practise humility (none of us knows the only way up the mountain, he said), aim high look for systemic change, and recognize that we’re on a journey. The relationship between venture philanthropy and social enterprises is a potentially fruitful one but needs to be nurtured. All relationships go through bumpy patches and it is important to realize this.

Finally, he urged participants to ‘Remember how lucky we are!’ It is a privilege to work with social entrepreneurs, he said. Ultimately, if anybody is to change the world, it will be them, not venture philanthropy funders.

Andrew Milner is a freelance writer and editor. He is associate editor of Alliance and edits the EVPA Newsletter. Email am@andrewmilner.free-online.co.uk

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